Managers are often the first people who see the need for a new ERP system. They field inquiries from customers, complaints from staff members and demands from the executive level. But selling change (especially change as expensive as ERP), takes both finesse and hard numbers.
If you’re coming to the realization that your organization might benefit from a new ERP system, it’s time to start generating strategies to convince upper management. Here are some good places to start:
1. Return on Investment. Executives need to see when, how and where the ERP system will start paying dividends. Begin by collecting data on the actual costs of time-consuming workarounds (e.g., one full-time employee spending x hours/week hand-counting inventory at $x cost) and showing how the system will increase efficiency and free up staff to generate returns via other initiatives.
2. Measurement Tools. People can be (rightfully) nervous about bloated ERP projects that suck time, energy and money and never meet expectations. Show that a new ERP system will have quantifiable results by identifying and describing key performance indicators of the project. Determine how success will be monitored throughout the implementation and beyond.
3. Standardization Strategy. One of the great benefits of an ERP system can be realized via standardization across business units. Identify departments wherein standardization could be most easily achieved (human resources, accounting, customer service, etc.) as well as those that might be a bit trickier, and develop a strategy to blueprint processes in each of them. Independent third-party consultants like Panorama are beneficial in this regard as we sort through “as is” processes to build the “to be” processes needed for enhanced business benefits and ERP system utilization. Documenting and mapping processes is also essential prior to software selection.
4. Change Management. Investigate and document previous training and organizational change management initiatives conducted by your company. What worked? What didn’t? What do end-users need to increase usability? Create channels of communication with end-users to start achieving buy-in and determining change management strategies from the beginning. Document what they say and communicate it to the executive level.
5. Total Cost of Ownership. Executives should have a clear picture of the total cost of ownership (TCO) for their purchases. This understanding should be applied to negotiate contract terms accordingly. In addition, the TCO should be quantified for at least seven years. Executives don’t like surprises. Work with a third-party consultant to determine the true TCO (including licensing, resources, integration and customization).
Analyzing and documenting the improvements, savings and benefits made possible by an ERP system is no easy task — but one which will likely reap great rewards if done correctly. The first step to any of this is to educate yourself. If you’re reading this blog, it’s clear that you’ve already begun.